Welfare reform has been near the top of the American political agenda for almost a decade, a reflection of persistent dissatisfaction with the Aid to Families with Dependent Children (AFDC) program. At the center of the reform discussion is the bedrock value of work. AFDC was created in 1935 primarily to ensure that women whose husbands had died or were disabled could care for their children without being compelled to go to work. By the end of the 1980s, however, most mothers were in the workforce, including mothers of young children, and the Depression-era commitment to helping mothers stay at home was considered obsolete. The key welfare reform question then became how best to move AFDC recipients into the workforce, toward self-sufficiency, and out of poverty — still an immensely important question.

States have traditionally responded to this question by implementing one of two different welfare-to-work program strategies. The first, often referred to as the "labor force attachment" (LFA) strategy, emphasizes placing people into jobs quickly, even at low wages, reflecting a view that the workplace is where welfare recipients can best build their work habits and skills. The second, often called the "human capital development" (HCD) strategy, emphasizes education and training as a precursor to employment, based on the belief that the required skill levels for many jobs are rising and that an investment in the "human capital" of welfare recipients will allow them to obtain better and more secure jobs. Although each strategy has elements of the other LFA programs include education and training components and HCD programs include job search components the two approaches both convey different messages to welfare recipients about the best route to self-sufficiency and emphasize different program components.

This report examines the relative strengths and limitations of particular versions of the LFA and HCD program strategies. It includes the findings from one part of a multi-year, seven-site evaluation and draws on the advantages of a unique experimental design implemented in three of those seven sites. The evaluation had its origins in the Family Support Act (FSA) of 1988, which marked a major shift in the philosophy of welfare by establishing a system of mutual obligation — between government and recipients — within the AFDC entitlement structure. As part of the Job Opportunities and Basic Skills Training (JOBS) program created by the FSA, welfare recipients had to look for and accept a job or participate in employment-promoting activities such as education, vocational skills training, or temporary, unpaid work experience provided through the welfare department; if they refused, they risked losing part of their cash (and, in some cases, Food Stamps and Medicaid) benefits. In turn, government was to provide a wider array of services and supports to a broader share of the welfare population than it ever had before — all with the purpose of equipping welfare recipients for work. More recently, the emphasis of welfare reform has again shifted: Recipients have stronger obligations to meet, states have a commanding and more flexible role, and the receipt of federal benefits is now subject to a time limit. Work, however, is still key. But what is the best way to make sure that welfare recipients who can work actually find and keep jobs? Various responses to that question are currently shaping federal and state welfare reform initiatives, and this report takes a preliminary look at two of them — the LFA and HCD approaches described above. (author abstract)